Whether you believe marijuana should be legalized or not, the fact of the matter is that over the next few years, more and more states will legalize the production and selling of the drug for commercial use. During the latest election season, while Donald Trump was defying odds and winning electoral votes, California, Massachusetts and Nevada legalized the recreational use of marijuana. With the its new legal status, like the Gold Rush of the 19th century, many Americans with an affinity for the drug are looking to start businesses around it. But just like the Gold Rush, many are also finding if difficult to do.
“According to the 2016 Marijuana Business Factbook, the national average startup cost of a dispensary is $325,000.” In addition, “72% of new pot businesses are backed primarily by their founders’ savings and debt.” To make matters more complicated, there are zero funding resources for businesses looking to enter the market due to legal issues. For an industry estimated to hit $4.3 billion in 2017, this is a huge obstacle for every day Americans considering a future in marijuana.
Starting a business in a new market will always have it’s ups and downs, but the seemingly insurmountable wall potential marijuana providers are facing is one of the tougher one. But this does make sense. Consider the fact that marijuana is a drug, and as such belongs in the pharmaceutical industry. Pharmaceutical companies are not easy to start. High costs, extensive legal requirements and rising insurance expenses makes the industry a tough one to maneuver. Take away funding opportunities and only rich people can take advantage of the market.
If you’re looking for future funding opportunities, you can stop right now. As long as the Federal Government does not label the new commercial drug as legal, there will be zero loans available from organizations like the SBA and its counterparts.
The Obama administration was never a big proponent of the legalization of marijuana, but with a new administration taking over, it may change the treatment of the drugs legalization. Only time will tell, but for now, the marijuana industry is a rich man’s game.
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